The purchase of the 61-unit Nani Maunaloa project enables the lenders to get 10 years of tax credits and also meet part of their federal Community Reinvestment Act requirements to make loans serving lower-income levels.
It is the first time in Hawaii that a lender consortium is using the tax credits, said Dot Shigemura, president of the Hawaii Investors for Affordable Housing Inc., a subsidiary of the Hawaii Community Reinvestment Corp. formed by Hawaii lenders five years ago to meet reinvestment goals.
Molokai Ranch Ltd., which developed Nani Maunaloa, said it is a unique development because 53 of the rentals are single-family homes and only eight are multi-family units. Most rentals in Hawaii are townhomes or apartments.
Monthly rents at Nani Maunaloa range from $450 for one-bedroom units to $619 for four-bedroom homes. There are also two-bedroom homes for $476 and three-bedroom homes for $550.
The 11 lenders are American Savings Bank, Bank of Hawaii, Central Pacific Bank, City Bank, Finance Factors, First Federal Savings, First Hawaiian Bank, First Hawaiian Creditcorp, Pioneer Federal Savings Bank, Rainbow Financial, and Commercial Credit Corp. (Hawaii).
Ownership of the rental project is held by the Nani Maunaloa Limited Partnership. Molokai Ranch is the general partner. Hawaii Affordable Housing Fund I, the lenders' investment, is the limited partner.
The project cost is $8 million. The lenders invested $3 million; tax exempt bonds supplied $3.9 million; and about $1.1 million was put up by Molokai Ranch.
"This is the first project for our group which was set up for these tax-credit projects," Shigemura said.
"We were incorporated in February, 1995, and have raised $19.7 million for these projects. Nani Maunaloa is the first. We also have made a commitment to invest in two other projects (in Napili, Maui and Kailua-Kona on the Big Island) when they are completed in the first quarter of 1998." That leaves about $13 million remaining (in the Hawaii Affordable Housing Fund I) to invest in other projects, she said.
Nani Maunaloa has been rented out to residents from throughout the island, including from old housing that was demolished by Molokai Ranch, Shigemura said.